Yes, the vegetation system creates it's own material file suffixed with _paged. When the shader system was built for this system, it was using the advanced shader. But in our opinion it doesn't even look as good as that. We do however have this planned in like you say and it will look and run much better on it's next pass, plus have lots more features and usability
It can still make some cool scenes and look good if you edit the material files manually.
But the workflow for the whole system needs worked to.